A FASB proposal that would require companies to improve disclosure of their potential withdrawal liability from leaving a multiemployer pension plan has provoked mixed reaction from corporate and accounting executives, according to comments to the Financial Accounting Standards Board.
The proposal would amend FASB pension accounting statements 87 and 88 as part of its primary focus to amend FASB statements 5 and 141 (revised) for the disclosure of a wide range of corporate loss contingencies. The loss contingencies would include a companys withdrawal liability from a multiemployer pension plan including part of the plans unfunded obligations arising from other employers, such as those unable to meet their obligations that might result from withdrawing from the plan.
Ernst & Young supports the withdrawal disclosure proposal, noting timely disclosure of the information would be helpful to financial statement users, according to a comment letter from the firm.
But Margaret M. Smyth, vice president-controller at United Technologies Corp., Hartford, Conn., wrote in a letter that the company opposes withdrawal liability disclosure because such contingencies are already subject to existing FASB reporting requirements.
The proposed amendments would be effective for year-end 2008 financial statements. But David Elsbree, FASB project manager for the proposal, said it is possible FASB will delay the effective date, needing more time to resolve the issues.
The open comment period on the proposal ends Aug. 8.